Employee relations in Singapore ‐ current issues and problems
| Date | 01 June 1996 |
| Pages | 48-61 |
| Published date | 01 June 1996 |
| DOI | https://doi.org/10.1108/01425459610116465 |
| Author | Tan Chwee‐Huat |
| Subject Matter | HR & organizational behaviour |
Employee
Relations
18,3
48
Employee relations in
Singapore – current issues
and problems
Tan Chwee-Huat
Faculty of Business, National University of Singapore, Singapore
Introduction
In the 1960s and early 1970s, unemployment was the major economic problem
in Singapore, which became an independent nation in 1965 after a short-lived
merger with Malaysia. An extensive industrialization programme was
introduced to provide generous incentives for foreign investors to set up export-
oriented labour-intensive industries. By the mid-1970s, the unemployment
problem was solved. With a small population of only three million, the island
nation now has a dependency on foreign workers for its labour-intensive
industries. These migrant workers come from other Asian countries, such as
Malaysia, Thailand, the Philippines and the Indian subcontinent. In order to
control the number of foreign workers, the government imposes a quota as well
as a levy on employers. Parliament has recently approved severe penalties to
discourage desperate employers from hiring illegal immigrants.
Singapore also faces the problem of an ageing workforce. As a result of higher
income, better nutrition and good medical care, the life expectancy of the average
Singaporean has increased from 70 years in 1980 to 74 in 1991 for males, and
from 75 to 78 for females. It has been projected that by the year 2030, the
proportion of persons aged 60 and above will reach 25 per cent of the population
(Hui, 1992; Shantakumar, 1995). In 1993, the retirement age was raised from 55 to
60. The current challenge for the government is to convince employers and
unions to extend it to 67 within the next ten years (Lee, 1995, p. 95).
In order to solve the problem of labour shortage, the government has been
encouraging companies to relocate their labour-intensive operations to
neighbouring countries such as Malaysia and Indonesia. Under the Johor-
Singapore-Batam Growth Triangle co-operation arrangement, the governments
of Singapore and Indonesia have jointly set up an industrial park on Batam, an
Indonesian island which is 20 kilometres or a 30-minute ferry ride away from
Singapore. The Malaysian southern state of Johor is linked to Singapore by a
causeway. The state government is pursuing an industralization programme to
attract investors from Singapore (Lee-Tsao, 1994).
Consequently, an increasing number of Singapore workers have faced
redundancy although most of them have no difficulty in finding other jobs.
Redundancy has affected mostly the lower-skilled workers,who need to be
retrained for other jobs.
Employee Relations, Vol. 18 No. 3,
1996, pp. 48-61 © MCBUniversity
Press, 0142-5455
To continue reading
Request your trial